Conference report to the 3rd edition makes the following changes.

Makes technical changes and organizational changes. Makes conforming changes to act’s long title.

Part I.

Extends the effective date of the act’s changes to GS 105-153.5, GS 105-153.A, GS 105-160.2, by one year. Makes technical changes.

Section 1.7.

Changes the start-date for the interest accrued for the fourth calendar quarter of 2024 pertaining to underpayments of tax in Section 13.1 of SL 2024-51 (withholding taxes interest waivers) so that it begins on January 31, 2025 (was, January 31, 2024).

Part II.

Extends the effective date of the changes made by the part by one taxable year.

Part III.

Section 3.2.

Modifies the term streamlined agreement in GS 105-164.3 so that it refers to the Streamlined Sales Tax and Use Tax Agreement as amended as of May 20, 2025 (was, as amended November 7, 2023).

Section 3.3.

Changes the effective date of the changes to GS 105-187.90 and GS 105-187.95 to when the section becomes law (was, July 1, 2025).

Section 4.3.

Changes the effective date of the changes to GS 105-113.39A(a2), GS 105-113.83A(a), and GS 105-449.42, to when the section becomes law (was, July 1, 2025).

Section 4.5.

Changes the effective date of the changes to GS 105-449.60, GS 105-449.97, and GS 105-449.72 to when the section becomes law (was, July 1, 2025).

Section 4.11.

Extends the effective date on the section’s changes to GS 105-113.4 and GS 105-113.36A(a) by one year.

Part V.

Section 5.1.

Removes proposed change to definition of Code in GS 105-228.90.

Part VI.

Section 6.4.

Makes technical change to part’s effective date.

Part VII.

Extend the part’s effective date by one year.

Section 7.2.

Removes the prior edition’s changes to the definitions provisions of GS 153A-156 and GS 160A-215.1 (county and city gross receipts tax on short-term leases or rentals).

Part IX.

Section 9.

Clarifies that the Secretary imposes the penalties set forth in GS 14-313 for violations of the certification requirements for consumable products. Makes technical changes. Specifies that the reinspection that occurs when a retailer, distributor, or wholesaler offers a product in violation of the statute for sale is conducted by the Alcohol Law Enforcement (ALE) Division and removes provisions setting thirty day time limit for the inspection. Specifies that goods taken, forfeited, or destroyed in subsequent inspections are done so by the ALE Division. Authorizes the ALE Division (was, Secretary) to store and dispose of seized products as appropriate. Replaces reference to “compliance check(s)” with “inspection” in GS 143B-245.15 (compliance). Allows for unannounced investigations along with general investigations. Makes conforming changes. Removes provisions requiring the ALE Division to publish the results of all compliance checks at least annually. Instead requires the Secretary to maintain a database of documented violations and make the results available to the public. Makes conforming changes to GS 18B-500 (subject matter jurisdiction for ALE agents).

Part X.

Section 10.

Extends the effective date for the section’s changes to GS 1-339.1 and GS 160A-233(c) by one year.

Part XI.

Section 11.

Modifies definition of credit union in GS 54-109.1. Modifies a credit union’s lending power under GS 54-109.21 (general powers) so that it can lend its funds to its members as provided in Articles 14A to 15A (was, 14L) of GS Chapter 54. Removes provisions authorizing loans to other credit unions or cities. Removes provisions in GS 54-109.26 (defining credit union membership) that would have allowed immediate family members of all the subject groups (not just employees) to obtain membership in a credit union. Removes prior edition’s changes to GS 54-109.27 (societies and other associations). Replaces references to “14L” with “14N” in GS 54-109.25 (other credit unions and specially designated common bonds). Modifies the persons to whom a credit union can also permit membership so that the account holder for individuals and families who are at or below the federal poverty line must be at least 25 years of age. Expands the mileage requirement for when a person can join because of lack of access to a bank branch from eight to nine from any bank branch. Defines branch. Requires a credit union to establish a branch located in the census tract if it does not have a branch already present there. Makes technical changes to GS 54-109.29 (members who leave the field of membership). Removes the prior edition’s changes to GS 54-109.30 (liability of shareholders) and GS 54-109.31 (meetings of members).  

Adds the following new content to Part XI.

Reduces the number of persons with a common bond to apply to organize a credit union under GS 54-109.2 from twelve to seven State residents.

Replaces references to the “Administrator of Credit Unions” with “Administrator” in GS 54-109.11 (duties of administrators). Removes provisions pertaining to surety coverage to the credit union with reference to loss by reason of acts or fraud or dishonesty, provisions pertaining to the amount of surety bonds, including the assets and coverage schedule, provisions relating to compromise and settlement of claims between the credit union and any surety or surety company. Requires the credit union’s board of directors to obtain bond (and insurance) coverage in excess of the minimum required by the Administrator if the board determines additional coverage is appropriate in relation to potential risks facing the credit union. Makes technical changes.

Limits a credit union’s ability to issue and operate a share or deposit account to minors under GS 54-109.60A to only those minors who receive payments, pay withdrawals, accept a pledge of the account, issue automated teller machine (ATM) and debit cards, and act in any other matter with respect to the account on the order of the minor with like effect as if the minor were of full age and legal capacity. Specifies that such accounts are free from the control of any other persons except creditors. Expands the documents that a minor obtaining an account must comply with to include agreements governing or permitting electronic access to the share or deposit account. Authorizes a credit union to lease minor(s) a safety deposit box, as described. Specifies that the provisions of GS 28A-15-13 will control the opening, inventory, and release of contents of the safe deposit box in the event of the minor’s death. Instructs the Administrator to submit a report to the specified NCGA committee by December 1, 2027, on the three matters specified pertaining to credit union parity requests.  

Effective July 1, 2026.

Adds the following new content to the act.

Section 1.8.

Modifies GS 105-153.5(a) and (b) (modifications to adjusted gross income), as follows. Modifies the calculation of repayment in the current taxable year of an amount included in adjusted gross income so that it is as modified under GS 105-153.5 and GS 105-153.6. Removes amounts received from the Business Recovery Grant Program and the ReTOOLNC COVID-19 relief program as deductible amounts from a taxpayer’s adjusted gross income. Effective for taxable years beginning on or after January 1, 2026.

Section 1.9.

Makes clarifying change to GS 105-154.1 by providing the statutory subsection where the partners of a taxed partnership are described for purposes of the tax credit. Effective for taxable years beginning on or after January 1, 2026.

Section 1.10.

Specifies that the amount of tax payable as shown on a return has to be paid within the time allowed for filing the return determined without regard to the extension allowed under other provisions of the tax code, in GS 105-157.

Section 1.11

Changes the amount where interest on a late estimated income tax is not charged under GS 105-163.15 from an amount specified in the IRS Code to less than $1,000.

Part III.

Section 3.4.

Adds term related person to the definitions pertaining to sales and use taxes (GS 105-164.3). Makes technical change to GS 105-164.13(5m) (exemptions for agricultural groups for retail sales and use taxes). Makes conforming change to GS 105-164.13B. Amends GS 105-164.16(b2) (prepayment of taxes) to allow the Secretary of Revenue (Secretary) to reduce the prepayment amount required from a taxpayer when the taxpayer demonstrates the tax collected during the current month is held in trust for another person.

Part IV.

Section 4.12.

Exempts locations where wholesale and retail dealers sell or make alternative nicotine products from the licensure requirements for other tobacco products in GS 105-113.39A. Instead makes those wholesale and retail dealers obtain a vapor and alternative nicotine products license.

Section 4.13.

Requires a distillery to remit the excise tax on all liquor sales occurring within a distillery estate district under GS 105-113.83.

Section 4.14.

Expands the Alcoholic Beverage Commission permittees required to register with the Secretary under GS 105-113.83A to include a local ABC Board. Makes technical and organizational changes.

Section 4.15.

No longer requires a resident brewery, resident winery, or resident wine producer to file a monthly information report with the Secretary under GS 105-113.84. Makes conforming changes. Effective July 1, 2026.

Section 4.16.

Modifies international fuel tax agreement in GS 105-449.37 so that refers to the Articles of Agreement amended January 1, 2025 (was, January 1, 2022).

Part V.

Section 5.5.

Modifies the type of information defined in GS 105-259 (secrecy required of tax officials) so that the definition of tax information includes information contained on a tax return, tax report, or an application for a license (currently, it includes information contained on a tax return, a tax report, or an application for a license for which a tax is imposed). Removes authorization to disclose tax information to provide a governmental agency or an officer of an organized association of taxpayers with a list of taxpayers who have paid a privilege license tax.

Section 5.6.  

Extends the effective date of SL 2022-13’s changes to GS 105‑236(a)(4) from July 1, 2027, to July 1, 2030.

Part VIII.

Section 8.6.

Removes amounts received from the Business Recovery Grant Program and the ReTOOLNC COVID-19 relief program as an allowable deduction from federal income made in determining State net income under GS 105-130.5. Effective for taxable years beginning on or after January 1, 2026.

Section 8.7.

Removes adjustment to corporate net worth under GS 105-122 (franchise or privilege tax on domestic and foreign corporations) for when the creditor corporation is taxable under GS Chapter 105’s Article 3, allowing the creditor corporation to deduct the amount of indebtedness owed to it by a parent, subsidiary, or affiliated corporation to the extent that such indebtedness has been added by the debtor corporation. Effective retroactively for taxable years beginning on or after January 1, 2021, and applicable to the calculation of franchise tax reported on the 2020 and later corporate income tax returns.

Part XII.

Updates the definition of Code in GS 105-228.90 to refer to the IRS Code enacted on July 5, 2025.

Enacts GS 105-103.5C and GS 105-153.6A, concerning adjustments when the State decouples from federal first-year expensing of domestic research and experimental expenditures, as follows. Specifies that a taxpayer who takes a deduction for research and experimental expenditures must add to the taxpayer's federal taxable income 80% of the amount taken for that year under the Code provision. Authorizes a taxpayer to deduct 25% of the add-back in each of the first four taxable years following the year the taxpayer is required to include the add-back in income. Specifies that the statute’s purpose is to decouple from the allowance of full first-year expensing of domestic research and experimental expenditures under section 70302 of the One Big Beautiful Bill Act. Specifies that the adjustments made in the statute do not result in a difference in basis of the affected assets for State and federal income tax purposes. Makes conforming change to GS 105-130.5 (adjustments to federal taxable income in determining State net income) and GS 105-153.5 (modifications to adjusted gross income). Applicable to: (1) taxable years beginning on or after January 1, 2022, for taxpayers who elect for federal income tax purposes the retroactive application of section 174A(a) of the Code for a taxable year beginning in 2022, 2023, or 2024 and (2) to taxable years beginning on or after January 1, 2025, for taxpayers who do not make that election.

Part XIII.

Section 13.1.

Expands the General Assembly’s legislative intent and purpose in GS 108A-112 to include findings about the vulnerability of older adults and statements of the General Assembly’s intent to balance the rights of older adults and disabled adults to direct and control their assets, funds, and investments and to exercise their constitutional rights consistent with due process with the need to provide financial institutions the ability to place narrow, 30-day limited restrictions on these rights in an effort to decrease older adults or disabled adults' risk of loss due to abuse, neglect, or financial exploitation. Makes clarifying changes and broadens definition of financial exploitation to include any acts or omissions by a person, including through the use of power of attorney, guardianship, or conservatorship, to do either of the following: (1) obtain control over the older adult's or disabled adult's money, assets, or property through deception, intimidation, or undue influence to deprive him or her of the ownership, use, benefit, or possession of the money, assets, or property or (2) divert the older adult's or disabled adult's money, assets, or property to deprive him or her of the ownership, use, benefit, or possession of the money, assets, or property. Adds term trusted contact to encompass any of four listed persons, including a natural person aged 18 or older whom a customer has expressly identified in a financial institution’s records who may be contacted about either the account or account owner to discuss the specified matter.

Expands good faith immunity for making a report of suspected fraud under GS 108A-115 to include agents of a financial institution. Further instructs that the financial institution, and, and its officers, employees, and agents, cannot be compelled in any action to identify the existence of or the contents of a suspicious activity report related to suspected financial abuse activity that may have been filed with the US Department of the Treasury. Makes technical changes.

Enacts GS 108A-118, authorizing a financial institution to choose to delay or refuse a disbursement or transaction from an account of a disabled adult or older adult or an account for which a disabled adult or older adult is a beneficiary or beneficial owner if: (1) the financial institution and its employees believe, based on individual observation or information received, that financial exploitation may have attempted or occurred or is currently being attempted or occurring; (2) the belief is based on an observation or the receipt of information; and (3) it initiates an internal review. Authorizes to a financial institution to take any six listed actions in response, including delaying or refusing transactions or withdrawals. Specifies that a financial institution’s authority to delay expires at the earlier of (1) 30 business days after the date on which the depository institution first acted under the authority in GS 108A-118; (2) when the institution is satisfied that the transaction or act will not likely result in financial exploitation of the older adult or disabled adult; and (3) upon court order. Allows for an additional 30-day extension based on the institution’s reasonable belief that financial exploitation may continue to occur or be attempted. Provides for 5-year record keeping of each incident. Provides for good faith immunity for financial institutions. Requires a financial institution to conduct training and adopt policies, as specified, before it can exercise the statutory authority in GS 108A-118 to delay or deny transactions. Clarifies how GS 108A-112 operates in relation to other statutes. Enacts GS 108A-119, authorizing a financial institution to notify a trusted contact if it believes that financial exploitation has or may have occurred, is being attempted, or has been or may have been attempted. Authorizes the financial institution to not notify the trusted contact if it believes that the contact is involved in the financial exploitation. Exempts any such disclosures from State privacy laws.

Section 13.2.

Adds term public notice to the 32 defined terms pertaining to savings banks in GS 54C-4. Removes proviso that the definitions apply to those terms unless “the context otherwise requires.” Removes process for a savings bank to obtain permission to establish a branch office in GS 54C-23. Expands the ways that State savings bank may establish branches in the State or another State to include de novo and by acquisition of existing branch offices of another depository institution. Sets deadline for the Commissioner of Banks (Commissioner) to make a decision on an application within fourteen days of the date of publication of the public notice required under GS 54C-4. Now requires the Commissioner to consider such factors as the financial condition and history of the applicant; the adequacy of its capital; the applicant's future earnings prospects; the character, competency, and experience of its management; the probable impact of the branch on the condition of the applicant State savings bank and existing depository institutions in the community to be served; and the convenience and needs of the community the proposed branch is to serve. (Currently, Commissioner must approve applications when four factors are met, including that the applicant has gross assets of at least $10 million). Now requires State savings banks to publish public notice as part of its request a change of location for its principal office or a branch to the Commissioner under GS 54C-24. Instructs the Commissioner to take into account any public comments received in response to the notice. Requires the Commissioner to approve the request if any of four conditions apply, including that the relocation does not result in a material change in the primary service area of the principal office or branch. Makes conforming changes, including to the statute's title. Removes content of GS 54C-60, pertaining to confidential information of the Commissioner, and/or the State Banking Commission, and instead directs that GS 53C-2-7 applies to records of the Office of the Commissioner pertaining to State saving banks.

Removes provisions in GS 54C-101 requiring a director of a State savings bank to have significant ownership in the bank. Directs that the corporate powers of the State savings bank are exercised by, or under the authority of, its board of directors, and the business and affairs of the State savings bank are managed by, or under the direction of, its board of directors. Allows the Commissioner to reduce the number of a board of directors to less than five members for good cause. Provides for quarterly meetings, and liability of the board of directors. Allows for the appointment of advisory directors, and specifies that no advisory director is liable for acts or omissions undertaken as an advisory director under the laws applicable to the performance of the duties of a director of a State savings bank, unless and only to the extent the advisory director undertakes or is delegated authority as a director of the State savings bank. Repeals GS 54C-102 (requiring a State savings bank’s bylaws to be approved by the Commissioner). Directs the Commissioner to review GS Chapter 54C and form a drafting group, if appropriate, to prepare updates and revisions to modernize the Chapter or to make recommendations on more fully integrating the supervision of savings banks into GS Chapter 53C (Regulation of Banks). Requires the Commissioner to submit a report on its findings and recommendations to the specified NCGA committee within one year of the act’s effective date.

Part XIV.

Section 14.

Adds new Article 52, Rounding of Cash Transactions, to GS Chapter 66, providing as follows.

Defines an entity as: (1) a private entity, or its employees or contractors, engaged in business with the public that accepts cash payments, or (2) a unit, department, or agency of the State government, or any division or subdivision of the unit, department, or agency, or a unit of local government, when the entity is engaged in business as a retailer and accepts cash as a method of payment. Excludes ABC stores from the definition of entity.

Allows an entity, if the penny is no longer in production, to round the total transaction amount to the nearest five-cent interval instead of to the nearest one-cent interval. Sets out principals to follow when rounding, including that rounding to the nearest five-cent interval does not apply to transactions for which payment is made by a noncash method, that the total transaction amount may be paid without rounding if the customer has the exact legal tender, and that any unit, department, or agency of the State government or any of their divisions or subdivisions, and local governments  must keep the funds derived from rounding up cash transactions. Sets out the methods to use for rounding. Specifies that round does not alter the sales price, the amount of tax owed, or any surcharges, assessments, or fees imposed on the sale. Also specifies that the statute does not authorize rounding the amount of sales tax due. Provides that there is no civil cause of action against an entity based on a rounding adjustment done according to this statute.

Allows an ABC store, if the penny is no longer in production, to round the total transaction amount to the nearest five-cent interval instead of to the nearest one-cent interval. Sets out principals to follow when rounding, including that rounding to the nearest five-cent interval does not apply to transactions for which payment is made by a noncash method, and that funds derived from round up are treated as gross receipts and must be distributed according to GS 18B-805. Sets out the methods to use for rounding. Specifies that round does not alter the sales price, the amount of tax owed, or any surcharges, assessments, or fees imposed on the sale. Also specifies that the statute does not authorize rounding the amount of sales tax due. Provides that there is no civil cause of action against an entity based on a rounding adjustment done according to this statute. Further amends this statute, effective July 1, 2027, to require, instead of allowing, ABC stores to round the total transaction amount to the nearest five-cent interval if the penny is no longer in production; makes conforming changes.

Makes conforming changes to GS 18B-804 and GS 18B-805.

Amends GS 105-164.10, concerning the calculation of retail tax, by adding that the sale price of a cash transaction does not change due to any rounding of the total transaction amount to the nearest dollar or cent amount still in production.

Amends GS 105-164.11, concerning excessive and erroneous collections, by adding that a seller is presumed to have a reasonable business practice if in the collection of sales and use taxes, the seller round a sale to the nearest five-cent interval according to GS 66-515 or GS 18B-804A if the penny is no longer in production.

Enacts new GS 75-45 and GS 81A-32 providing that rounding of a consumer sale by a business to the nearest five-cent interval according to GS 66-515 or GS 18B-804A if the penny is no longer is production is not a violation of the respective GS Chapter (Chapter 75, Monopolies, Trusts and Consumer Protection; Chapter 81A, Weights and Measures Act of 1975).

Amends GS 105-357 to require that taxing units, when the penny is no longer in production and not available for in-person tax payments made in cash, to round the final digit of the amount owned down to the nearest five-cent interval. Tax payments rounded down are treated as paid in full. Makes additional clarifying changes.

Part XV.

Section 15.

Amends GS 160A-635 to increase payment for members of the Board of Trustees of the Piedmont Authority for Regional Transportation from $50 to $100 as compensation for attendance at each duly conducted meeting.

Part XVI.

Section 16.

Enacts new GS 105-163.2C requiring (1) licensed interactive sports wagering operations and (2) ADW licensees, to deduct and withhold State income taxes form the payment of winnings in an amount of $600 or more. Requires the amount of taxes withheld to be a percentage of the winnings that is based on the individual income tax rate. Requires gaming operators to file a return, pay the withheld taxes, and report the amount withheld in the manner required in the specified statutes as if the winnings were wages. Applies to winnings paid on or after July 1, 2026.